System and method for administering telematics based reinsurance pools

ABSTRACT

A data processing system includes a processor for determining a percentage share to assign a share of relative risk in an insurance pool between an insurer, a first safety vendor and at least one other safety vendor. The processor is further configured to allocate portions of the insurance pool among the insurer and the safety vendors according to the determined shares assigned to the insurer and the safety vendors, to aggregate by the insurer loss information related to the insurance pool, and transmit the loss information to the safety vendors. Also, the processor may allocate portions of a claim liability or a received premium associated with the insurance pool among the insurer and the safety vendors according to the determined shares assigned to the insurer and the safety vendors.

CROSS-REFERENCE TO RELATED APPLICATION

The present application is a continuation of U.S. patent applicationSer. No. 12/617,152 entitled “SYSTEM AND METHOD FOR ADMINISTERINGTELEMATICS BASED REINSURANCE POOLS” and filed on Nov. 12, 2009. Theentire contents of that application are incorporated herein byreference.

FIELD

The present invention relates to risk management systems and practicesthat rely on electronic monitoring of motor vehicle operations.

BACKGROUND

Telematics is a rapidly growing field in connection with risk managementfor fleets of motor vehicles. Telematics entails installation of one ormore sensors on a motor vehicle for the purpose of monitoring the useand/or condition of the motor vehicle. The telematics sensor data mayrelate, for example, to the vehicle's speed, location, acceleration,etc. The data generated and/or collected by the sensors is transmittedby telecommunications (e.g., via satellite and/or a cellular telephonenetwork) to a central computer. The central computer stores, compilesand analyzes the sensor data to provide information that may be used fordriver evaluation, risk management, and/or insurance policyunderwriting, among other applications.

According to another typical aspect of telematics systems, sensor datamay be provided as an input to an onboard computing device. The onboardcomputing device may drive an output device to provide warnings or otherfeedback to the driver when unsafe operation is occurring.

A number of existing companies function as telematics vendors. As isfamiliar to those who are skilled in the art, a telematics vendorsupplies and/or installs telematics sensors, and/or receives and storesthe telematics sensor data and provides reports about vehicle operationbased on the telematics sensor data.

Like any supplier of services, a telematics vendor has incentives toprovide effective services based on a desire for continued businessengagements and for a good reputation. The present inventors have nowrecognized a need to still more strongly align the interests oftelematics vendors with vehicle fleet operators and/or insurers.

SUMMARY

An apparatus, method, computer system and computer-readable data storagemedium are disclosed which include determining a percentage share toassign of relative risk in an insurance pool between an insurer, a firstsafety vendor and at least one other safety vendor. The apparatus,method, computer system and computer-readable data storage medium alsoinclude allocating portions of the insurance pool among the insurer andthe safety vendors according to the determined shares assigned to theinsurer and the safety vendors. The apparatus, method, computer systemand computer-readable data storage medium also include aggregating bythe insurer, loss information related to the insurance pool. Theapparatus, method, computer system and computer-readable data storagemedium also include transmitting the loss information to the safetyvendors, and allocating portions of a claim liability or a receivedpremium associated with the insurance pool among the insurer and thesafety vendors according to the determined shares assigned to theinsurer and the safety vendors.

Because the safety vendors (e.g., telematics vendors) participate in therisks insured by the insurance policies, the safety vendors' interestsare more tightly aligned with the insured and with the insurancecompany, which may lead to enhanced and more comprehensive riskmanagement services for the insured.

With these and other advantages and features of the invention that willbecome hereinafter apparent, the invention may be more clearlyunderstood by reference to the following detailed description of theinvention, the appended claims, and the drawings attached hereto.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a block diagram of a system provided according to aspects ofthe present invention.

FIG. 1A is a block diagram of an alternative embodiment of the system ofFIG. 1.

FIG. 2 is a block diagram that illustrates aspects of the system of FIG.1.

FIG. 3 is a block diagram representation of a computer that implements aportion of the system of FIG. 1.

FIG. 3A is a block diagram representation of another computer thatimplements another portion of the system of FIG. 1.

FIG. 4 is a flow chart that illustrates a process performed in thesystem of FIG. 1.

FIG. 4A is a flow chart that illustrates some details of the process ofFIG. 4.

FIG. 5 is a block diagram/flow chart representation of aspects of thesystem of FIG. 1.

FIG. 5A is a simplified schematic view of a vehicle dashboard asprovided in one of the vehicles represented in FIG. 1.

FIG. 5B is a schematic side view of one of the vehicles represented inFIG. 1.

FIG. 6 is a flow chart that illustrates a process that may be performedin accordance with aspects of the present invention by the computerdepicted in FIG. 3.

FIG. 7 graphically illustrates aspects of the process depicted in FIG.6.

DETAILED DESCRIPTION

In general, and for the purposes of introducing concepts of embodimentsof the present invention, a telematics vendor participates in insuredrisks for a fleet of motor vehicles via a reinsurance treaty. Thereinsurance treaty may cede risks under the fleet insurance policy to acaptive reinsurer that is at least partially owned by the telematicsvendor. In some embodiments, other ownership interests in the captivereinsurer may be held by the operator of the motor vehicle fleet and/orby a managing general agent that is affiliated with the primary insurerthat issued the fleet insurance policy. Losses ceded to the captivereinsurer are reflected in data provided to the captive reinsurer and tothe telematics vendor. The telematics vendor may use the ceded loss datato refine its analysis of telematics sensor data.

FIG. 1 is a block diagram of a system 100 provided according to aspectsof the present invention. The system 100 includes a fleet of motorvehicles 102. The motor vehicles 102 may be of any type, including forexample over-the-road trucks, passenger cars, taxis, local deliveryvans, etc. The motor vehicles 102 need not be road vehicles, but mayalternatively be watercraft or aircraft. The fleet of motor vehicles 102is operated by a fleet operator which is a policy holder (or prospectivepolicy holder) and which is represented by block 104 in FIG. 1.

In accordance with conventional practices, one or more telematicssensors 106 are installed on each of the motor vehicles 102. Blocks 106are also intended to represent, in addition to the sensors themselves,one or more devices that transmit sensor data, via a telecommunicationsnetwork 108, to a telematics vendor 110.

The telematics vendor 110 is an entity that supplies and/or installstelematics sensors, and/or receives and stores the telematics sensordata and provides reports about vehicle operation based on thetelematics sensor data. In addition, the telematics vendor may performadditional functions as described below. The telematics sensor data mayrelate, for example, to the vehicle's speed, location, acceleration,deceleration, environmental conditions (e.g., presence of icy roads orprecipitation), times of operation, tire pressure, engine use time, andvehicle diagnostic information. As used herein, the term “telematicssensor” may also refer to sensing systems which detect vehicles ahead ofor behind the vehicle which carries the sensor, and/or sensors whichdetect that the vehicle is straying from the proper lane of travel. Inaddition, or alternatively, the telematics sensors supplied, installedand/or monitored by the telematics vendor may be installed in a buildingto monitor conditions in or around the building. In addition, oralternatively, the telematics sensors supplied, installed and/ormonitored by the telematics vendor may be worn by a human being and usedto monitor movements of the human being for the purposes of guiding thehuman being to perform job activities in a safe manner. The telematicssensors 106 may all be conventional and may operate in a conventionalmanner to provide one or more of the types of telematics sensor datareferred to above. The telecommunications network 108 may also beconventional.

Also included in the system 100 is an insurance agent 112 which receivesfrom the policy holder 104 information concerning the fleet of motorvehicles 102 operated by the policy holder 104. (However, in alternativeembodiments of the system 100, there may be no agent representing theinsured—i.e., the insured may deal directly with the insurer—or theremay be more than one insurance agent participating in the system 100.)Still further, the system 100 includes an insurance company 114 which,in turn, receives from the insurance agent 112 the motor vehicle fleetinformation which originated from the policy holder 104. The insurancecompany 114 issues a property/casualty insurance policy which covers thefleet of motor vehicles 102. The insurance policy may be conventional,but in some embodiments of the invention may also be bundled with otherservices, as explained below. The insurance company 114 may also bereferred to as the “primary insurer” or simply as the “insurer”.

Still further, and in accordance with aspects of the present invention,the system 100 includes a captive reinsurance company 116 which may beat least partially owned by the telematics vendor 110. The captivereinsurance company 116 may be referred to as a “reinsurer”.

FIG. 1A is a block diagram of an alternative embodiment of the systemshown FIG. 1. In FIG. 1A, the system is generally indicated by referencenumeral 100 a. In the system 100 a shown in FIG. 1A, all the systemcomponents shown in FIG. 1 are again present, and need not be describedagain in detail. However, the flow of information may be somewhatdifferent in the system 100 a as compared to the system 100 shown inFIG. 1. In particular, in the system 100 a, the insurer 114 may providedata concerning claims received relative to the primary policy directlyto the telematics vendor 110, as indicated at 152 in FIG. 1A. Moreover,the captive reinsurer 116 may provide reports directly to the policyholder/insured/fleet operator 104, as indicated at 154 in FIG. 1A.

FIG. 2 is a block diagram that illustrates aspects of the system 100depicted in FIG. 1. As diagrammatically illustrated in FIG. 2, thetelematics vendor 110 holds at least a partial ownership interest in thecaptive reinsurance company 116. Also indicated in phantom by block 202in FIG. 2 are other entities that may hold one or more partial ownershipinterests in the captive reinsurance company 116. In descriptions whichare set forth below concerning embodiments of the invention, variousownership structures for the captive reinsurance company 116 will beenumerated.

As indicated at 204 in FIG. 2, the primary insurer 114 and the captivereinsurance company 116 enter into a reinsurance contract under which atleast some risks under the insurance policy on the motor vehicle fleetare ceded to the captive reinsurance company 116. Arrow 206 in FIG. 2represents the cession of the risks under the primary policy to thecaptive reinsurance company 116. Reinsurance should be understood toinclude all known types of reinsurance arrangements including but notlimited to, quota share, excess of loss, facultative, and per risk.

In the context of reinsurance, ceding a risk means to pass on to thereinsurer all or part of the insurance written by a primary insurer withthe object of reducing the possible liability of the primary (or ceding)insurer. A cession may accordingly be the whole or a portion of singlerisks, defined policies, or a defined division of business, all asagreed in the reinsurance contract (also referred to as the reinsurancetreaty). In order to trigger the reinsurance contract the primaryinsurer must perform the act of ceding which, in the context of areinsurance treaty, generally entails the primary insurer reporting tothe reinsurer the qualifying risks bound under the terms of the treaty.In addition, the ceding insurer must pay to the reinsurer a portion ofthe premium commensurate with the liability assumed by the reinsurer.

A particular numerical example of reinsurance will now be provided.

In the treaty context, a reinsurer agrees in advance to assume part ofthe risks underwritten. In a quota share treaty, a reinsurer'sparticipation is usually determined by fixed percentages. For example, aprimary insurer underwrites a risk providing $1,000,000 in coverage toan insured. The primary insurer's policy contains a deductible of$100,000 that the insured is responsible for paying. The primary insurerthen reinsures 50% of its exposure of $900,000 ($1,000,000−$100,000deductible) to the captive reinsurer. The captive reinsurer assumes a50% proportional share of the $900,000 liability. In the event of a$500,000 loss, the insured would pay the first $100,000 and the primaryinsurer and the captive reinsure would each pay its 50% proportionalshare of the loss or $200,000.

If the premium for the $1,000,000 policy is $100,000, the primary andthe captive reinsurer would split the total net premium according to thequota share percentages, 50/50. The premium shared is net of acquisitioncosts, commissions to the agent, taxes, etc.

Each of the blocks 104, 110, 112, 114 and 116 shown in FIG. 1, inaddition to representing a respective entity, should also be understoodas representing one or more computers operated by or on behalf of therespective entity. Data communications may be exchanged as needed amongat least some of the computers referred to in the preceding sentence.

Various example ownership structures and interrelationships amongentities, in accordance with example embodiments of the invention, willnow be described.

For example, the managing general agency (represented by block 112 inFIG. 1) may be wholly owned by a holding company (not separately shown).In some embodiments, the holding company may be owned 40% by the primaryinsurer 114, 40% by one or more telematics vendors (including thetelematics vendor 110 represented in FIGS. 1 and 2), and 20% by themanagement of the holding company/managing general agency.

The holding company may provide corporate center services, andrelationship management with issuing carriers, telematics vendors andinsurance producers (agents and brokers).

The managing general agency 112 may exercise underwriting authority forcommercial automobile liability insurance for large fleets of vehicles.The managing general agency 112 may obtain field and service centersales and pre-underwriting services under contract with the primaryinsurer 114. Further, the managing general agency 112 may provide a fullsuite of fleet cost control services to operators (insureds) of thefleets of vehicles. The cost control services may include accidentprevention, fuel cost management and vehicle maintenance costmanagement. These services may be integrated with services provided tothe insureds by one or more telematics vendors with respect to datagathering and reporting. In addition, the managing general agency 112pays commissions to the insurance producers.

The captive reinsurance company 116 may be 65% owned by the managementof the holding company/managing general agency and 35% owned by one ormore telematics vendors (including the telematics vendor 110). Thecaptive reinsurance company 116 may assume quota share reinsurance fromthe primary insurer 114 on all policies underwritten by the managinggeneral agency 112. This aligns underwriting interests between themanaging general agency 112 and the primary insurer. In someembodiments, for example, the assumed quota share may be 50% of thefirst $500,000 per accident. The captive reinsurance company 116 may paya ceding commission to the managing general agency 112 in considerationof the production of the primary insurance business.

The primary insurer 114 pays commissions to the managing general agency112 and is responsible for policy issuance and claims management. Forloss sensitive policies (i.e., policies on which the insured retainsrisk) the insured may choose to use a third-party claims administratorthat is on an approved list maintained by the primary insurer 114.

The telematics vendor or vendors (such as the telematics vendor 110represented in FIGS. 1 and 2) provides sensors/data transmission devicesand associated reporting services to the fleet operators/insureds. Thetelematics vendor(s) also provide integration of data gathering andreporting with the overall fleet cost control services program offeredby the managing general agency 112.

The insurance producers (not shown) may be a limited number of agentsand brokers authorized to produce business to be underwritten by themanaging general agency 112. The insurance producers may submit businessdirectly to the managing general agency 112.

In some embodiments, the primary insurer 114 which partially owns themanaging general agency 112 may issue less than all of the policiesunderwritten by the managing general agency 112. One or more otherissuing carrier may issue other fleet liability policies underwritten bythe managing general agency 112.

In some embodiments, the primary insurer 114 which partially owns themanaging general agency 112 may use several alternative reinsurers,including the captive reinsurance company 116 represented in FIGS. 1 and2. These alternative reinsurers may include single owner captivereinsurance companies owned by large corporations.

In some embodiments, a “syndication” approach may be used on some or allof the primary policies, with two or more issuing carriers participatingon a single primary policy.

In some embodiments, the captive reinsurance company 116 may be a “groupcaptive” at least partially owned by the fleet operators/insureds. Inthis case, for example, the cession to the captive reinsurer may be 30%of the first $250,000 of each loss. This may align the risk controlinterests of the insureds and the primary insurer.

Alternatively, the captive reinsurance company 116 may be an “agencycaptive” at least partially owned by the insurance producers.

In some embodiments, one or more unions that represent the insured'sdrivers may own an interest in the captive reinsurer.

In some embodiments, the managing general agency 112 works only with asingle telematics vendor, which may own 100% of the captive reinsurancecompany 116. The cession to the captive reinsurer may be 30% of thefirst $250,000 of each loss. This may align the risk control interestsof the telematics vendor and the primary insurer.

In some embodiments, private equity investors may make investments inthe holding company.

An example business process flow for the ownership/interrelationshipstructure set forth above will be described below in connection withFIG. 4.

In the ownership/interrelationship structure set forth above, theprimary insurer 114 may receive income as its share of income earned bythe managing general agency 112 in commissions and in fees for fleetcost control services. The primary insurer may further receiveunderwriting and investment income on the premiums (net of reinsurance)from policies underwritten by the primary insurer. Still further, theprimary insurer may receive ceding commissions from the captivereinsurance company 116, and contractual fee income for field andservice center sales and pre-underwriting.

The telematics vendor 110 may receive income as its share of incomeearned by the managing general agency 112 in commissions and in fees forfleet cost control services. Further income for the telematics vendor110 may come from sale or lease of telematics devices and from thetelematics vendor's share of underwriting and investment income of thecaptive reinsurance company 116.

The management of the holding company/managing general agency mayreceive income from their share in the income of the managing generalagency 112 in commissions and in fees for fleet cost control services,and in their share of underwriting and investment income of the captivereinsurance company 116.

Other issuing carriers, if present, may receive underwriting income andinvestment income on the premiums, net of reinsurance, on the policiesthey issue.

In some embodiments, as an alternative to the captive reinsurerdescribed above, one or more entities (e.g., one or more telematicsvendors) may each obtain ownership of a segregated accounting cell in aso-called “rent-a-captive” offshore reinsurer, and via the segregatedaccounting cell may receive a cession of risk under the primary policyor policies.

FIG. 3 is a block diagram representation of a computer 301 operated byor on behalf of the telematics vendor 110 and or the captive reinsurancecompany 116. Hereinafter, the computer illustrated in FIG. 3 will bereferred to as the “telematics vendor computer 301”.

As depicted, the telematics vendor computer 301 includes a computerprocessor 300 operatively coupled to a communication device 302, astorage device 304, one or more input devices 306 and one or more outputdevices 308.

Communication device 302 may be used to facilitate communication with,for example, other devices (such as sensors 106 and/or computersoperated by the policy holder 104, the primary insurer 114 and/or otherentities depicted in FIG. 1). Continuing to refer to FIG. 3, the inputdevice(s) 306 may comprise, for example, a keyboard, a keypad, a mouseor other pointing device, a microphone, knob or a switch, an infra-red(IR) port, a docking station, and/or a touch screen. The input device(s)306 may be used, for example, to enter information. Output device(s) 308may comprise, for example, a display (e.g., a display screen), aspeaker, and/or a printer.

Storage device 304 may comprise any appropriate information storagedevice, including combinations of magnetic storage devices (e.g.,magnetic tape and hard disk drives), optical storage devices, and/orsemiconductor memory devices such as Random Access Memory (RAM) devicesand Read Only Memory (ROM) devices. At least some of these devices maybe considered computer-readable storage media, or may include suchmedia.

In some embodiments, the hardware aspects of the telematics vendorcomputer 301 may be entirely conventional.

Storage device 304 stores one or more programs (at least some of whichbeing indicated by blocks 310-318) for controlling processor 300.Processor 300 performs instructions of the programs, and therebyoperates in accordance with aspects of the present invention. In someembodiments, the programs may include a program 310 that programs thetelematics vendor computer 301 to receive, request, gather and/or storethe telematics data generated by the sensors 106 (FIG. 1). The program310 may be provided in accordance with conventional practices.

Another program stored on the storage device 304 is indicated at block312 and is operative to program the telematics vendor computer 301 toanalyze the telematics data received from the sensors 106. In somerespects, the program 312 may be provided in a conventional manner, butin other respects (such as taking loss data into account), the program312 may reflect aspects of the present invention as described herein.

Still another program stored on the storage device 304 is indicated atblock 314. Program 314 may generate reports based on the analysis of thetelematics data performed by program 312. These reports may, forexample, be provided to the policy holder 104 pursuant to riskmanagement service offerings jointly provided by the telematics vendor110 and the managing general agency 112. In some respects the reportsgenerated by the program 314 may be conventional; in other respects thereports may reflect aspects of the present invention.

Continuing to refer to FIG. 3, storage device 304 also stores a program316, which operates to control the telematics vendor computer 301 toengage in data communications with other devices/computers. Program 316may be constituted by conventional data communications software.

In addition, the storage device 304 may store a program 318, whichcontrols the telematics vendor computer 301 to analyze data received bythe telematics vendor computer 301 which relates to losses ceded by theprimary insurer 114 to the captive reinsurance company 116.

There may also be stored in the storage device 304 other software, suchas one or more conventional operating systems, database managementsoftware, device drivers, website hosting software, etc.

Still further, the storage device 304 may store a database 320 forstoring and managing the telematics data received from the sensors 106.In addition, the storage device 304 may store a database 322 whichcontains reports generated by the report generation program 314 referredto above. Also, the storage device 304 may store a database 324 forstoring and managing the ceded loss data referred to above in connectionwith the program 318.

FIG. 3A is a block diagram representation of a computer 351 operated byor on behalf of the insurer 114 (FIG. 1). Hereinafter, the computerillustrated in FIG. 3A will be referred to as the “insurance companycomputer 351”.

The hardware architecture of the insurance company computer 351 may beconventional and may be the same as that of the telematics vendorcomputer 301 shown in FIG. 3. Thus, the above description of thehardware aspects of the telematics vendor computer 301 is equallyapplicable to the hardware aspects of the insurance company computer351. Nevertheless, the following description is provided to summarizethe hardware components of the insurance company computer 351.

The insurance company computer 351 may include a processor 350 that isin communication with a communication device 352, a storage device 354,an input device 356 and an output device 358. The storage device 354 maystore an application program 360 which programs the insurance companycomputer 351 to perform functions relating to issuance of primaryinsurance policies. In addition, the storage device 354 stores anapplication program 362 which programs the insurance company computer351 to assign quota shares in the primary policy in a manner that isdescribed below. Further, the storage device 354 stores an applicationprogram 364 which programs the insurance company computer 351 toallocated losses incurred under the primary policies to parties to whichquota shares have been assigned with respect to the policies.

The storage device 354 may further store a database 366 with respect toprimary insurance policies issued by the insurer 114. Also, the storagedevice 354 may store a database 368 which stores information concerningone or more telematics vendors to which quota shares in the primarypolicies may be assigned. In addition, the storage device 354 may storea database 370 which contains data relating to losses incurred under theprimary insurance policies, as well as a database 372 with respect tolosses ceded by the insurer 114 under reinsurance treaties that areapplicable to the primary insurance policies.

The storage device 354 may store other programs, such as one or moreoperating systems, device drivers, web hosting software, etc., and mayalso store one or more other databases relating to operations of theinsurance company computer 351.

FIG. 4 is a flow chart that illustrates a business process flowperformed in the system 100.

At 402 in FIG. 4, an insurance producer submits an account to a regionaloffice or service center operated by the primary insurer 114. At 404,the primary insurer 114 performs pre-underwriting with respect to theaccount. (As is familiar to those who are skilled in the art,“pre-underwriting” may involve preliminary screening of the risk as tobasic qualifications for possible coverage. For example, such screeningmay be automated or manual, and may identify major characteristics ofthe risk such as what kind of vehicle fleet is operated, how manyvehicles, how old the company is, prior loss reports, etc.) The primaryinsurer 114 then refers the account to the managing general agency 112,as indicated at 406 in FIG. 4. Then, at 408, the managing general agency112 underwrites and prices the account, and provides a quote to theinsurance producer which submitted the account.

Block 410 in FIG. 4 represents acceptance of the quote by the proposedinsured (policy holder 104, FIG. 1). Then, at 412, the managing generalagency 112 provides information required for policy issuance to theprimary insurer 114. At 414, the primary insurer 114 provides acommission to the managing general agency 112 (and the managing generalagency 112 shares the commission with the insurance producer). At 416,the primary insurer 114 cedes a quota share of the insured risk to thecaptive reinsurance company 116. In connection with the cession, thecaptive reinsurance company 116 pays a ceding commission to the primaryinsurer 114.

FIG. 4A is a flow chart that illustrates some details of step 416 inFIG. 4. At 452 in FIG. 4A, the insurance company computer 351 determinesa rule that governs one or more quota shares to be assigned with respectto the primary policy. For example, according to some rules, the quotashares to be assigned are fixed in accordance with embodiments describedabove in connection with FIG. 2. In other embodiments, the rules mayprescribe quota shares that vary depending on characteristics of theprimary policy, and/or of the telematics vendor(s) involved, and oroperations of the insured fleet of vehicles. For example, in someembodiments, where two or more telematics vendors hold interests in thecaptive reinsurer, the quota shares assigned may correspond to apercentage of telematics devices respectively supplied by eachtelematics vendor for the vehicles in the insured fleet. In anotherexample, the rule may prescribe that the quota share assigned to thecaptive reinsurer may depend on the proportion of the insured fleet inwhich telematics devices are installed.

Continuing to refer to FIG. 4A, at 454 the insurance company computer351 determines the quota shares to apply to the primary policy inaccordance with the rule determined to be applicable at 452. Then at456, the storage device 354 in the insurance company computer 351 storesthe assigned quota shares. One or more reinsurance treaties with one ormore captive reinsurers or segregated accounting cells are entered intoto reflect the assigned quota shares.

Referring again to FIG. 4, at 418 the primary insurer 114 issues thepolicy, and bills the premium to the insured/policy holder 104. At 420,the managing general agency 112, in cooperation with the telematicsvendor 110, provides fleet cost control services to the policy holder104. In some cases, the fees for these services may be bundled with thepremium billed to the policy holder 104. Alternatively, however, theseservices may be billed on an unbundled basis.

The processes and/or steps represented in FIG. 4 should be understood asbeing only examples of processes and/or steps that may be performed inaccordance with embodiments of the invention. The invention is notlimited to processes and/or steps represented in FIG. 4.

FIG. 5 is a block diagram/flow chart representation of aspects of thesystem 100, particularly related to telematics services provided by thetelematics vendor 110.

Block 106 in FIG. 5 represents telematics sensors which detect one ormore of use, location, and condition of a motor vehicle 102 (FIG. 1),and/or driver behavior at least insofar as the driver behavior isexpressed in operation of the vehicle 102. Block 502 in FIG. 5represents one or more driver feedback devices which are coupled to atleast some of the sensors 106 and which are driven by at least sometelematics data to provide feedback at appropriate times to the driverof the vehicle 102. For example, the driver feedback device 502 mayinclude a red display lamp (not separately shown in FIG. 5) installed onor near the dashboard of the vehicle. The display lamp may beilluminated in response to the sensors 106 detecting one or more ofexcessive acceleration, deceleration, braking, abrupt maneuvering, etc.The illumination of the display lamp may function as feedback to thedriver to indicate to the driver that he/she has operated/is operatingthe vehicle in a manner that increases risk of loss.

FIG. 5A is a simplified schematic view of a vehicle dashboard 520 asprovided in one of the vehicles 102 represented in FIG. 1. Shown in FIG.5A are a conventional speedometer 522, fuel gauge 524 and theabove-mentioned display lamp, indicated at 526.

FIG. 5B is a schematic side view of a typical one of the vehicles 102represented in FIG. 1. Block 530 in FIG. 5B indicates one or more of theabove-described telematics sensors which are installed in the vehicle102. Block 532 represents circuitry which is responsive to the sensors530 and which transmits telematics sensor data to the telematics vendor110 (FIG. 1).

The sensors 106 and driver feedback device 502 indicated in FIG. 5 maybe constructed and may operate in a substantially conventional manner.In addition or as an alternative to the display lamp, the vehicle mayinclude an audible alarm and/or a heads up display.

At 504 in FIG. 5, at least some of the telematics data generated by thesensors 106 is transmitted to the telematics vendor computer 301 (FIG.3) operated by the telematics vendor 110 (FIG. 1). Then, at 506, thetelematics vendor computer 301 analyzes the telematics data transmittedto it at 504. This may, for example, occur in several stages. Forexample, an initial analysis may be performed in accordance withconventional practices, including for identification of patterns of useof the vehicle 102 that may be relevant to risk management, fuelmanagement, maintenance cost management, etc. Subsequent analysis maythen be performed to reflect ceded loss data provided either directly tothe telematics vendor computer 301 or indirectly via the captivereinsurance company 116.

At 508, the telematics vendor 110 may use the results of the analysis ofthe telematics data to generate one or more recommendations provided tothe policy holder 104 by the telematics vendor 110 and/or by themanaging general agency 112. In line with such recommendations, thepolicy holder 104 may engage in activities (block 510, FIG. 5) tocounsel the driver of the vehicle 102 and/or to discipline the driver ina manner designed to improve the driver's behaviors in operating thevehicle 102. The ability to identify specific behaviors and target thosebehaviors for training and modification may result in a reduction oflosses under the insurance policy and more opportunity for profit thanthe insurer, reinsurer, and/or safety vendor would otherwise have had.

The safety vendor can take the additional data obtained from the insurerand reinsurer (actual loss reports, motor vehicle reports, creditscores, etc.) and combine them with the data it generates from thedevices allowing the safety vendor to cross reference the telematicssensor data and analytics to improve the functionality of the telematicssystem.

The safety vendor can then employ the improved telematics system,thereby creating a learning loop complete with real world experience tofurther develop the telematics technology.

FIG. 6 is a flow chart that illustrates a process that may be performedin accordance with aspects of the present invention by the telematicsvendor computer 301 depicted in FIG. 3.

At 602 in FIG. 6, the telematics vendor computer 301 receives thetelematics data generated and transmitted by the sensors 106 (FIG. 1).Continuing to refer to FIG. 6, at 604, the telematics vendor computer301 analyzes the telematics data received at 602. For example, thetelematics vendor computer 301 may analyze the telematics data in aconventional manner to identify patterns of use of the vehicle 102 thatmay be relevant to risk management, fuel management, maintenance costmanagement, etc. Then, at 606, and based on the telematics data analysisat 604, the telematics vendor computer 301 generates one or more reportsfor the policy holder/fleet operator 104 (FIG. 1) to inform the policyholder 104 of any significant results of the analysis of the telematicsdata. The report may, for example, provide information that indicates ordescribes driving behaviors of drivers of the vehicle 102. The reportmay be provided directly from the telematics vendor computer 301 to thepolicy holder 104 (e.g., via data communication from the telematicsvendor computer 301 to a computer (not separately shown) operated by thepolicy holder 104). Alternatively, the report or key points from thereport may be provided to the policy holder 104 via comprehensive riskmanagement/fleet management services provided to the policy holder 104by the managing general agency 112 in cooperation with the telematicsvendor 110.

At 608, the telematics vendor computer 301 receives data indicative ofone or both of (a) loss amounts allocated to the captive reinsurancecompany 116 (and consequently to the telematics vendor 110 through itsownership interest in the captive reinsurance company 116) in connectionwith risks ceded to the telematics vendor 110 pursuant to thereinsurance treaty 204 (FIG. 2); and (b) claims made/losses experiencedunder the primary policies that were subject to the reinsurance treaty204. It will be appreciated that the types of data (a) and (b) referredto in the previous sentence may overlap or be one and the same. Thetelematics vendor computer 301 may receive this data directly from theprimary insurer 114 (i.e., from a computer—not separately shown—that isoperated by or on behalf of the primary insurer). In addition, oralternatively, the telematics vendor computer 301 may receive this dataindirectly, via a computer (not separately shown) that is operated by oron behalf of the captive reinsurance company 116, the data havingoriginated with the primary insurer 114.

At 610, the captive reinsurance company 116 settles its reinsuranceobligation to the primary insurer in regard to the losses allocated tothe captive reinsurance company 116 in connection with the ceded risks.This may be done in a conventional manner.

At 612, the telematics vendor computer 301 analyzes the loss/claim datareceived at 608. A purpose of this analysis may be to detect patterns ofvehicle operation that are correlated with increased risk/incidence ofclaims under the fleet insurance policy. For example, as illustrated inFIG. 7, the telematics vendor computer 301 may apply telematics data 702(received at 602 in FIG. 6) and claims/loss data 704 (received at 608 inFIG. 6) to train a predictive model represented at 706 in FIG. 7. Thepredictive model 706 may be implemented as a neural network or withanother conventional technique. The telematics vendor computer 301 mayuse the resulting trained predictive model to analyze telematics datathat is subsequently received by the telematics vendor computer 301 inorder to identify risks involved in driver behavior/vehicle usagerepresented by the telematics data, as represented by block 708 in FIG.7. The refinement of the telematics data analysis by the telematicsvendor computer 301, as depicted in FIG. 7, is indicated at block 614 inFIG. 6.

The current state of the telematics art excludes information that is notgenerated by the device installed in the vehicle. Data on actualcrashes, damage to vehicles, claims of negligence and other law suitsbrought against a driver or employer, motor vehicle reports, policereports, loss control consultant's training, ranking and scoring ofdrivers, etc. are not available to the telematics provider but arecontained and collected by insurer loss control consultants, theemployer, and government agencies like the registry of motor vehiclesand police departments. This information collectively may be referred toas “loss control data”. In accordance with aspects of the presentinvention, and in order to generate an accurate predictive model, thetelematics data is correlated with the loss control data to provide acomplete picture of incidents, driver behavior, severity of incidents,and overall driver and fleet safety. For example, the telematics devicemay register a small change in g-force applied to the vehicle andregister the incident as minor based on the raw accelerometer data asprocessed by the telematics algorithms and computer models. Thisincident is then correlated with the accident reports, the liabilityclaims and police reports which yields a result that, although theaccelerometer register a small amount of g-force, the vehicle madecontact with a pedestrian causing injury. The correlated data(telematics data plus loss control data) creates an enhanced incidentand driver profile that more accurately depicts driver incidents andultimately risk, which, allows for a more focused training of drivers,enhanced underwriting and more accurate predictive computer models.

In some embodiments, reports and/or data generated in the system 100 maybe useful for benchmarking fleet operators against each other withrespect to risk management and/or cost management.

In some embodiments, the fleet cost control services provided to thefleet operators may incorporate risk management as to fuel costs. Forexample, fleet operators may be permitted to participate in grouppurchasing of fuel and/or hedging.

In some embodiments, either a primary insurer, or a derivative risktransfer product can protect the fleet operator against unexpectedmovements in the cost of fuel, which is then reinsured through thereinsurance mechanism transferring some of the exposure to a safety orfuel management vendor.

In some embodiments, the telematics data may be provided to the primaryinsurer and may be analyzed by the primary insurer for the purpose ofrepricing the policy at intervals (e.g., weekly or monthly) during theterm of the policy.

Up to this point, the invention has been described primarily in thecontext of commercial vehicles, and particularly with respect tomotor-freight vehicles or fleets. Nevertheless, the invention can alsobe readily applied in the context of other types of commercial vehicles,such as buses, taxis, limousines and tow trucks. The invention is alsoapplicable to fleets of aircraft or watercraft as well as land vehicles.

Still further, the invention is applicable to systems in which sensorsare carried by human beings whose work activities such as lifting itemsare to be tracked or monitored for the purpose of detecting potentiallyunsafe modes of job performance. Thus the term “moving bodies” as usedin the appended claims, refers to vehicles as well as human beings whosemovements are tracked by sensors. The primary insurance policiesinvolved in the latter embodiments may provide workers compensationcoverage.

Generally, up to this point in this disclosure, the invention has beendescribed with reference to one or more telematics vendors that have aninterest in a captive reinsurance company. However, the principles ofthe invention may be applied more generally to safety vendors other thanor in addition to telematics vendors. The term “safety vendor” refersnot only to telematics vendors, but also to suppliers of vehicle partsthat improve the vehicle's safety performance, contractors who providesafety consulting and/or training and/or employee motivation and/oremployee evaluation services to the insureds, and/or contractors whoprovide safety-enhancing painting services for vehicles.

In portions of the disclosure provided herein, it is mentioned that thetelematics vendor may co-analyze the telematics data and loss/claim datawith a view to refining reports on telematics data and/or risks that maybe detected via telematics. In addition or alternatively, co-analysis oftelematics data and loss/claim data may be performed by the primaryinsurer, based on telematics data the primary insurer receives from thetelematics vendor.

In example embodiments disclosed above, the primary insurance isproperty and/or casualty insurance or workers compensation insurance.However, the primary insurance may be any kind of insurance, includinge.g. life insurance (e.g., life insurance the drivers of a fleet ofvehicles). Moreover, as used herein, the term “insurance” should beunderstood to include all insurance or risk transfer products, includinghedges, swaps, etc.

Example embodiments disclosed above involve a captive reinsurer, but inalternative embodiments, the reinsurer is not a captive, but is whollyor partly owned by a safety vendor.

Any services described herein as being performed by the managing generalagent may in addition or alternatively be performed by the primaryinsurer(s).

The process descriptions and flow charts contained herein should not beconsidered to imply a fixed order for performing process steps. Rather,process steps may be performed in any order that is practicable.

As used herein and in the appended claims, the term “computer” refers toa single computer or to two or more computers in communication with eachother and/or operated by a single entity or by two or more entities thatare partly or entirely under common ownership and/or control.

As used herein and in the appended claims, the term “processor” refersto one processor or two or more processors that are in communicationwith each other.

As used herein and in the appended claims, the term “memory” refers toone, two or more memory and/or data storage devices.

As used herein and in the appended claims, an “entity” refers to asingle company or two or more companies that are partly or entirelyunder common ownership and/or control.

As used herein and in the appended claims, “losses” refer to events thatresult in damage, injury and/or liability covered by an automobile orfleet insurance policy or by a workers compensation insurance policy.

The present invention has been described in terms of several embodimentssolely for the purpose of illustration. Persons skilled in the art willrecognize from this description that the invention is not limited to theembodiments described, but may be practiced with modifications andalterations limited only by the spirit and scope of the appended claims.

What is claimed is:
 1. An automated data processing system comprising: acommunication device; a processor coupled to the communication device; astorage device in communication with said processor, the storage devicestoring instructions adapted to be executed by said processor for:determining a percentage share to assign relative risk in a telematicsbased insurance pool between an insurer and a third party, wherein thepercentage share is determined based on a percentage of monitoringdevices deployed by the third party; allocating the insurance pool amongthe insurer and the third party according to the determined percentageshare; aggregating, by the insurer, telematics related loss informationrelated to the monitoring devices deployed; transmitting, via saidcommunication device, the telematics related loss information to thethird party; and allocating a claim liability or a received premiumassociated with the insurance pool among the insurer and the third partyaccording to the determined percentage share; and a memory for storingthe determined percentage share assigned to the insurer and the thirdparty.
 2. The data processing system of claim 1, wherein the monitoringdevices are installed in motor vehicles.
 3. The data processing systemof claim 1, wherein the monitoring devices are attached to human bodies.4. The data processing system of claim 1, wherein the memory storesinformation indicative of a proportion of a vehicle fleet in which themonitoring devices are deployed by the third party, the processordetermining the percentage share based at least in part on saidinformation.
 5. A method, comprising: determining, by a computerprocessor, a percentage share to assign relative risk in a telematicsbased insurance pool between an insurer and a third party, wherein thepercentage share is determined based at least in part on a percentage ofmonitoring devices deployed by the third party; allocating, by thecomputer processor, the insurance pool among the insurer and the thirdparty according to the determined percentage share; aggregating, by theinsurer, telematics related loss information related to the monitoringdevices deployed; transmitting the telematics related loss informationto the third party; and automatically allocating, by the computerprocessor, a claim liability or a received premium associated with theinsurance pool among the insurer and the third party according to thedetermined percentage share.
 6. The method of claim 5, wherein themonitoring devices are installed in motor vehicles.
 7. The method ofclaim 5, wherein the monitoring devices are attached to human bodies. 8.The method of claim 5, further comprising: determining informationindicative of a proportion of a vehicle fleet in which the monitoringdevices are deployed by the third party, wherein the percentage share isdetermined based at least in part on said information.
 9. Anon-transitory computer-readable medium storing instructions that, whenexecuted by a processor, result in the performance of a method, themethod comprising: determining a percentage share to assign relativerisk in a telematics based insurance pool between an insurer and a thirdparty, wherein the percentage share is determined based at least in parton a percentage of monitoring devices deployed by the third party;allocating the insurance pool among the insurer and the third partyaccording to the determined percentage share; aggregating, by theinsurer, telematics related loss information related to the monitoringdevices deployed; transmitting the telematics related loss informationto the third party; and automatically allocating a claim liability or areceived premium associated with the insurance pool among the insurerand the third party according to the determined percentage share. 10.The medium of claim 9, wherein the monitoring devices are installed inmotor vehicles.
 11. The medium of claim 9, wherein the monitoringdevices are attached to human bodies.
 12. The medium of claim 9, furthercomprising: determining information indicative of a proportion of avehicle fleet in which the monitoring devices are deployed by the thirdparty, wherein the percentage share is determined based at least in parton said information.